Introduction Just the facts, Jack The coronavirus pandemic upended life as we know it. As large gatherings were banned around the world, movie theaters were among the early venues to shutter — forcing studios to rethink the release and marketing strategies Tofor their latestVOD films. Leading upor to COVID-19, not to VOD? the entertainment industry was already in a Howstate of COVID-19 flux. Consumers iswere transforming increasingly the movie industry moving to streaming and on-demand services and while studios have been accommodating the shift in their planning for the post-theatrical ‘lifecycle’ of their movies, the pandemic forced executives to redesign release strategies on the spot.
Here at Diesel Labs, we’ve been monitoring the impact of studios’ decisions, and below, we examine exactly how the movie ecosystem is transforming as a result and provide some specific Content Analytics, including demo- graphic and engagement insights, around Universal Pictures’ Trolls World Tour.
For this analysis, we included all the mov- ies that were impacted by COVID-19 March 1 through June 15, 2020. This list includes those with release dates during the analysis period as well as any with release dates lat- er in the year that were delayed during the analysis period. We are also opting to use the broader term VOD to refer to digital release, as some movies were released to PVOD (like Trolls World Tour) and others to SVOD (like Artemis Fowl to Disney+) and both are ulti- mately revenue driving strategies in different ways. 1 Here at Diesel Labs, we’ve been monitoring the impact of studios’ decisions, and in An Introduction this report we examine how the movie ecosystem is transforming as a result. We L eading up to COVID-19, the entertainment specifically dug into the Content Analytics industry was already in a state of flux. (demographics, engagement and audience Consumers were increasingly moving to insights) for Universal Pictures’ Trolls World streaming and on-demand services, forcing Tour given its breakout performance and role movie studios to closely examine the post- in demonstrating to the industry that releasing theatrical life cycle of their movies. Further movies straight to VOD* can be a viable complicating the situation, the coronavirus strategy. pandemic upended life as we know it. Large gatherings were banned around the world, and *We are opting to use the broad term VOD to movie theaters were among the early venues refer to digital release, as some movies are to shutter, meaning studios had to quickly — released to PVOD (like Trolls World Tour) and and completely — rethink the release and others to SVOD (like Artemis Fowl to Disney+) marketing strategies for their latest films. and both are ultimately revenue-driving strategies. 1 Trolls World Tour Breaking down success through the lens of Content Analytics Universal Studios rose quickly to the challenge presented by the pandemic with Trolls World Tour, a sequel to the 2016 hit Trolls. While the film did open in a few drive- in theaters on April 10, the bigger story is what happened on digital: Universal made the decision to release it straight to VOD on the same day. The result? The biggest debut for a digital movie release ever, grossing an estimated $100 million and “netting Universal more revenue in three weeks than the original Trolls movie scored over five months at the domestic box office,” per a report from The Wall Street Journal.
One reason why Universal may have decided © Rafael Ben-Ari / Adobe Stock to release Trolls World Tour to VOD is because despite being big budget, it was a smaller risk; Volumes of Conversation as Deadline reported in April, “even if Trolls World Tour does not recoup per se, it’s another Right off the bat, we can see that Trolls World cog in the wheel of its franchise, which those Tour generated about half (53%) of the close to the film tell us is a booming $700M, conversation as its average theatrical release including merchandising.” counterparts from 2019 (Figure 1). However, if you remove Disney Pixar films from the It’s clear that the decision to release was comparison set, then Trolls World Tour well made, backed up by strong revenue actually outperformed last year’s conversation results. But a closer look at the film’s Content benchmarks for family / animation films by Analytics illuminates some of the risks and 37%. new strategies that studios will have to address if they are to follow the same path. We studied three factors:
1. Volumes of conversation 2. Content of conversation 3. The audience makeup for Trolls World Tour vs. comparable family / animation
films © Sushiman / Adobe Stock 2 Figure 1
Trolls World Tour performed well on social, beating the non-Disney / Pixar, animated average
Content of Conversation Figure 2 The conversation content on a movie’s release day is typically related to anticipation (“I can’t wait to see it!”) or post-viewing feedback (“the movie was great!”). In the case of Trolls World Tour, a full 30% of the conversation on the day of the release was related to a watch party event hosted by Walmart. In addition, 5% of the conversation referenced Walmart itself — tying the viewing and merchandising aspects of the film together. As host, Walmart live-tweeted the watch party, sharing behind- the-scenes clips and interviews with the talent throughout, which helped boost the movie’s overall social media engagement and impression levels (Figure 2).
Deep Dive into Trolls World Tour, continued 3 Audience Makeup The audience demographics are notably In fact, the Trolls World Tour audience different, with the Trolls World Tour audience overlapped with the 2019 family / animation skewing slightly older than the average theatrical release audience only 3.6%. theatrical release audience for comparable 2019 family / animation films (Figure 3).
Figure 3
Deep Dive into Trolls World Tour, continued 4 Unpacking the Decision Release to VOD vs. delay Trolls World Tour is only part of the story, During the analysis period (March 1 through however. To get the full picture of what’s June 15, 2020), release schedules and happened to the movie industry due to the strategies for 123 movies were impacted 1. Of COVID-19 pandemic, we analyzed how genre those, 72.4% were delayed and 27.6% were and previous cost/revenue trends may have released to VOD (including films that were in affected studios’ decision to delay films or theaters before shelter-in-place orders began) release to VOD. (Figure 4).
Figure 4
Figure 5 Observing the data by genre, it is clear that genre played a role — particularly in driving the decision to delay (Figure 5). Movies with visuals that may be more enjoyable on larger screens, such as action and sci-fi films, were held for later release. On the other end of the spectrum, dramas, musicals and comedies were split, with some movies released directly to VOD and others delayed. This insight leads to the question around how costs and revenue may have played a role in the decision making process (if action movies are the most expensive / biggest breadwinners, then it would make sense to delay them).
1 Impacted is defined as any movies with release dates during analysis period (3/1/20 – 6/15/20) as well as any with release dates later in the year but were delayed during the analysis period. 5 We examined a “normal” movie year (2019) to $98.7m respectively), produce nearly the understand historical performance by genre. same amount of domestic revenue (family Across all movies last year that grossed at / animation average being just 4% higher at least $4 million at the box office (roughly 150 $210 million) and are neck and neck in terms movies), action and family / animation were of their cost / revenue ratios. the top two performing genres (Figure 6). They made up 32.2% of the movies on the list Among the movies released directly to VOD, (17.4% and 14.8%, respectively) but together 30% were low budget (<$10 million) and 70% accounted for a staggering 71.1% of the total were big budget — suggesting costs and worldwide revenue (40.7% and 30.4%). box office revenue potential alone were not Notably, action and family / animation movies a major driver in the decision to release vs both cost the same on average ($111.6m and delay.
Figure 6
Action and Animation / Family are Hollywood’s biggest money makers and are nearly neck and neck in efficiency
Unpacking the Decision, continued 6 Conclusion Key takeaways In some states, theaters are beginning to rental versus going to a theater) could be here open up, though questions remain about to stay. precisely how these re-openings will unfold (will masks be required, will theaters apply But releasing to VOD is not always a slam social distancing guidelines between parties, dunk — two other family / animation films etc). It won’t be a surprise if studios continue that were also released to VOD in the analysis to deliberate on whether to hold or release, period did not fare quite as well. Scoob! ($ n/a) given that the revenue potential via theatrical and Artemis Fowl ($125M) were big budget release is likely going to be limited for the movies that debuted to very modest social foreseeable future. There’s also consumer engagement, clocking in roughly 59% and behavior to consider — some of these new, 26% lower than Trolls World Tour, respectively learned practices (such as opting for a VOD (Figure 7).
Figure 7
This suggests that VOD is not an easy distribution format. Our analysis illuminated substitute for a theatrical release, and best three things for studios to keep in mind — practices will need to be established in order though it’s certain that this is just scratching to set a film up for success with this new the surface: 7 Tailor Social Strategies For VOD Releases Social marketing is emerging as a priority channel given its proximity to audience engagement, and techniques such as establishing watch parties are a driver of success. A good example unfolding now is the watch party campaign for Hamilton on Disney+ (scheduled for July 3rd). The release of the movie to VOD is now an event, complete with support from the cast and bonus content that will be shared on social media leading up to and even throughout the viewing. Despite all these changes in marketing priorities going forward, one thing hasn’t changed — that the goal is to tap into audience FOMO. First Mover Advantage
Trolls World Tour captured lightning in a bottle: people were suddenly stuck at home, no new family / kids content had come out in a while, there was a baseline of awareness and interest (merchandising) plus lots of partner support (Walmart). And in the category of ‘there’s no such thing as bad publicity,’ AMC Theatres’ decision to ban Universal Studios movies as a result of the Trolls World Tour VOD release also helped boost awareness and conversation around the film. It was certainly a varied combination of factors (including undoubtedly a thorough marketing plan) that helped support the successful launch of the movie, and audiences heavily rewarded it for being ‘first’. Real-time Audience & Content Insights
In March 2020 we observed a 42% lift in TV show conversation year-over-year, but the unprecedented engagement levels declined over the course of the last few months. In mid-June, an Instagram livestream event called Verzuz, featuring Alicia Keys and John Legend, was one of the most engaged-with pieces of content — beating out all traditional shows and movies for the week. In late- June, Fortnite announced it would screen Christopher Nolan’s Inception within the game in support of his upcoming filmTenet . Keeping up with these rapidly shifting trends, just as Universal Studios did with Trolls World Tour, has become more important than ever. It is essential to understand the cultural climate in order to break through the noise and establish awareness of and excitement for your content. In sum, media formats and marketing methods are more dynamic than ever, and data that provides real-time insight into the content consumption of your target audience is critical.
8 www.diesellabs.com [email protected]